National's ongoing silence on KiwiSaver has landed another backbencher in hot water after he appeared to signal plans to water down employers' contributions.

Taranaki MP Shane Ardern was reported yesterday in his local newspaper, the Te Awamutu Courier, as suggesting the employer contribution needed to be adjusted to reduce pressure on small business owners.

National Party sources said there were no plans to introduce a two-tier system. Big and small employers would be required to pay the same amount. Mr Ardern had no idea what was in the policy, they said. It was known only to leader John Key and his deputy Bill English.

But the assurance came only after National earlier refused to confirm or deny Mr Ardern's statement and Mr Ardern claimed to have been misquoted. National was previously forced to hose down suggestions it would axe the employers' contribution altogether, after its industrial relations spokeswoman Kate Wilkinson said National did not believe in compulsion.

Leader John Key had to issue an assurance that employer contributions would remain at "fairly similar levels" to those provided for in the scheme - 1 per cent rising to 4 per cent over time.

The KiwiSaver gaffe came as Labour headed into an all-day strategy session admitting it was the underdog in the upcoming election campaign.

It gave Prime Minister Helen Clark a fresh opening from which to fire an attack at National, after it was forced to confirm plans to partly privatise ACC and reiterated its intention to introduce a 90-day probation period for new employees in businesses employing fewer than 20 workers.

Mr English said the policy would allow small businesses to take a risk on workers they might otherwise not employ, such as former prisoners or people with little work experience. Large businesses could better deal with underperforming staff, he said.

Miss Clark, who labelled the policy daft, said yesterday any policy from National was a relief - Labour had been fighting "blancmange" up till now. "We've been in a phony war."

Labour has plunged in the polls and it is facing a backlash over rising petrol prices and living costs, coming to a head with a truckies protest last week.